GST can be calculated simply by multiplying the Taxable amount by GST rate. If CGST & SGST/UTGST is to be applied then CGST and SGST both amounts are half of the total GST amount.
GST = Taxable Amount x GST Rate
If you have the amount which is already including the GST then you can calculate the GST excluding amount by below formula
GST excluding amount = GST including amount/(1+ GST rate/100)
For example, GST including amount is Rs. 525 and GST rate is 5%.
GST excluding amount = 525/(1+5/100) = 525/1.05 = 500
GST is calculated on the transaction amount and not on the MRP.
Calculation of GST Amount payable to Government
A registered person needs to pay the difference of GST on sales and GST on purchases made in a month. The purchase may be of goods, services or capital goods.
Capital goods are those goods which you had NOT purchased for the purpose of reselling. For example – Furniture in your shop, machine for production etc.
For example, A person made intra-state sales of Rs. 1 lakh in January and collected CGST of Rs. 2,500 and SGST of Rs. 2,500 at the rate of 5%. In the same month, he had made purchases of Rs. 80,000 and paid CGST and SGST of Rs. 2,000 each at a rate of 5%. He had also paid a bill of internet of Rs. 1,000 plus GST of Rs. 180.
Rs. 4,180 is allowed as a deduction from the Gross tax payable of Rs. 5,000. And therefore a net of Rs. 820 is payable to the government.
Deduction of GST paid on the purchase of goods, services or capital goods is called input tax credit. There are certain limitations and restrictions on taking the input tax credit.
GST Rates
GST rates are as under
- 0% (necessity items like milk, wheat flour)
- 0.25% (rough diamonds)
- 3% (gold, silver etc.)
- 5%
- 12%
- 18%
- 28%
Most of the goods fall in the category of 5%, 12% and 18%, while most of the services fall in the category of 18%. GST of 28% is applicable on some items like cement, car, tobacco. There is also a Cess which is applicable only on a handful of goods like car, tobacco, pan masala.
There are also goods/services on which GST is applicable at NIL rate or which are exempted.
You can easily calculate GST amount using our GST Calculator.